Backstory: I'm a 2nd year associate at a BB, did 2 years of analyst work before b-school, and figured I'd give it another run after MBA.
Two week ago, I secured a job offer from one of the Big 3 consultancies. I have a few more days to make a decision on whether or not to accept. I'm starting to lean in the direction of yes.
Reasons:
Comp:
In previous years, it would have been a no-brainer that comp @ a BB would rapidly outstrip consulting 3-5 years in, and the upside would be much higher. Now I'm not sure that's true anymore. I think comp and headcount in banking are gonna fall drastically in the next few years. The entire future expected earnings pattern is entirely different from what it was even 3 years ago. Senior guys who used to bank $1-$2 mm+ in bonus a few years ago are now talking about how $500ish is the new normal.
Portability:
Let's say I stay at the BB. Every year, a bigger and bigger chunk of my comp will be in stock. The longer I stay, the less I will be able to leave, because of unvested stock. If I get canned, I lose my stock. And my skills won't be that transferable the longer I stay.
Work:
I'm genuinely unhappy here. Not because of the finance. I love finance and the industry that I cover (TMT). But what I'm seeing is that regulation and all sorts of crazy risk management procedures slammed into place after 2008 are making this job unbearable. Internal memos that were maybe 15 pages long when I was an analyst are now 80+ pages long. I really didn't sign up for this job to be a professional PowerPoint design artist.
Numbers:
All BBs are bloated. What's happening now is that at the mid levels (VPs), those guys are so terrified of being canned (they're expensive, but don't bring in any revenue) that they are desperately doing everything possible to show that they are adding value, even if its making gratuitous edits for no other reason than to show that they are doing something, and in the process, creating work for everyone involved. Their ranks are going to be culled like you won't believe soon, and I don't want to be in that place when it happens.
So I'm thinking of making the jump to consulting. Leaning toward yes. But happy to listen to opinions and attempts to talk me out of this.
It isn't prudent to leave a position due to fear that may not be grounded in fact - so before you do, just make sure that your estimates about career progression, comp in the future, etc. are fairly realistic (it seems like you may have already done this).
Otherwise, you've been in the industry to know what you like and what you don't (unlike most on this site). Fresh starts like the one you're pondering can be awesome for one's morale, motivation, etc. I say go for it - as a consultant with a legitimate finance background you can really carve out a niche in your new shop (espeically if you're extroverted to boot).
Good luck with the next step! Please let us know how it works out
P.s. if you want, can you disclose your comp package/entry level at the MBB compared to your associate comp? Interested in the difference.
Base is quite comparable. Bonus -- that's another question. I think the only issue here is that if this gruesome round of depressed comp as in the last year continues, all-in might be comparable too. There's stories on the street about how UBS MDs got 20K cash, VPs got 20K all-in, donuts all around, etc.
Someone else on this thread def has a point about how privately held boutiques might do very well. I think this is very true as well. If you hire a BB to do a M&A that has a 20-man deal team vs. a boutique that has a 4-man deal team, you'll probably get the same outcome. The other thing I've noticed is that work 1) expands to fill the time allocated to it, and 2) expands to occupy the time of people assigned to do it. I'm amazed at how work can just be "created" for deals with long timeframes and larger teams that don't for deals with short timeframes and small teams, but are executed just as successfully. The cost structure is too high, and as a result, inefficiency is creeping into the system.
"I really didn't sign up for this job to be a professional PowerPoint design artist."
Don't consultants spend just as much time on powerpoint?
You've got 2 opposing factors: lower headcount and increasing regulation. The bankers will figure out a way to pay themselves. I could see privately-held boutique/MM banks becoming pretty popular.
So make the choice on where you want to exit out to in the future. If you're not sure, I'd do consulting (as long as you're sure you don't want to stay in banking). You've already got banking experience, being an associate since going stand out too much more.
Do you even like Consulting? Back late last year, when I was still unsure on the Consulting vs Finance route, I spoke to numerous alums in both fields. By and large, all of them, regardless of finance vs consulting, deeply disliked their jobs. A couple alums said they liked their firm's environment, but both were from one of MBB and that too in a Cali office. That's it.
PE or HF? Obviously, the lack of pre-MBA experience is a hurdle, but the switch is not unheard of.
And I am referring to pre-MBA PE experience.
Sorry to go off-topic, but can anyone show me (e.g. send me a sample PPT) what exactly a fantastic Powerpoint (presentation) is?
I've always wondered about this.
Not exactly PowerPoint presentations. They are pitchbooks made in PowerPoint.
Presentations have slides with a couple bullets of large text and are meant to be shown off a screen. Pitchbooks have sophisticated financials/charts/tables in font-size 10 and you have to print them out in front of you in order to read them.
Most pitchbooks are full of confidential info so no one can show you a sample without disclosing the bank and the clients. A few month earlier Oracle posted a pitchbook by Qatalyst but think them took them off. Maybe try googling.
Forget BB or working for a public company.
For for a top notch private boutique. I think you will be quite desired at such places since you have pre-MBA analyst experience.
Consulting could be a great way to go, but you are going to be traveling a LOT. You only get a shot at life once, if you're leaning Consulting, then go for it.
Work for a private company and you will be fine.
Two funny-ass stories that nearly caused me to lose it this week. Both of them have happened to me before, but never on the same day.
MD I've worked with before calls me up and asks for a transaction screening deck. I put one together in the layout I think he likes and send it off. He emails me back a few hours later with changes. They are drastic, requiring me to redo the entire deck. I send it back. A few hours later, another major rewrite. And then an email asking me to revert back to v2 for a few things. And then another two iterations, before he says it's good to go. At this point, it's maybe 2% different from what I originally put together. Minus 10 hours of wasted time and unnecessary work.
Different MD I've worked with before emails me, cc'ing a VP and the SVP/ED/D (hereinafter known as "SED") and asks me to pull a few slides from a previous deck I did and laying out with specific instructions what he wants changed/added/removed. I do it, and send it to the VP. VP sends it back with comments, rearranging stuff. I turn them, and send it back to the VP who sends it back with comments again. Now it goes to the SED, who has his own set of comments. At this point, its completely indistinguishable from what the MD asked for. Finally, about 8 hours after I get the original email from the MD, and about 7 hours after I first send a draft to the VP, it goes off to the MD.
10 minutes later, I get a call. "WTF, this looks NOTHING like what I asked for, and why the hell did it take so long?!" So now I look bad for being a nincompoop, and the VP and SED look bad for not checking my work. Anyway, I recovered because the deck at that pt was v8, and I immediately sent him v1 (what he wanted), so hopefully he got the message that his underlings subverted the line of communication of what he wanted.
And this ladies and gentlemen is why I need to get the fuck out of banking asap
comp may be down right now, but it may well recover later on(when you are more senior).
Out of curiosity, what made you choose the associate path vs leaving banking after your 2yr stint?
When I left banking it was 08, so I opted to go to bschool instead of trying my luck at pe. As for why post bschool, I dunno. Tunnel vision? Annoyed at hastened departure in 08 and desire to finish the job? Just no exposure to what else was out there? Lack of knowledge as to the changes in the industry?
I don't profess to being an expert on consulting, but I would lean towards yes. Let's face it, the financial industry is in massive cyclical decline. On the time horizon that is relevant for most people, the decline is secular, not cyclical. The sell-side will take the brunt of it. Will there always be a need for someone to advise corporations on their capital-raising needs? Certainly. Will the pay and prestige worsen over time? Quite possibly. I think right now could be a short-term bottom, it will never be a straight line down, but you have to think about where you want to be in 5-10 years.
Assuming the above, the question comes down to this. Do you love finance enough to stick it out, despite a shrinking industry? If that question is no, then you should look at whether consulting is attractive to you. Considering that you went far enough to secure an offer, I think it probably is.
It is true that consulting will give you more options, since you have the chance to go to industry, while as an ASC+ in banking you are likely stuck. I have seen VP level bankers applying for junior analyst positions at HFs, there is a lot of desperation to blow out. It often isn't the best move to follow the crowd, but given how miserable banking can be, it is understandable.
Go for MBB and don't look back - assuming you're not taking a pay cut (on an hourly basis) of more than 20%.
That's an arbitrary #, but this is your shot to really branch out and become more marketable across client-focused roles (more consulting / boutique, advisory-focused banking) or perhaps something more investing-focused (PE/HF/etc.).
Don't force yourself to dramatically adjust your personal lifestyle (i.e. take a huge pay cut), but I see a good number of the associates at my BB firm going for these types of moves. This industry has taken a perhaps structural downturn and you're still young enough to broaden your experience set and make yourself more marketable.
If you were really secure about your abilities and passion for the field, you'd pick an option because you kick ass at it and you love it. The fact that you raise these questions
1) leads me to question your criteria for career route
2) makes me challenge your intrinsic motivations for what you're going to be spending the majority of your life for the foreseeable future doing (considering the heavy time consumption of both fields)
I'm just taking a stab at helping you prevent midlife crisis.
Just my .02
@Feinstein- why don't you just stay in your current position and actively look for a PE gig? Also did you go to an M7 MBA?
Because wall st is a small place. People talk. Analysts looking for a pe gig are expected, but of any of the senior guys gets the idea that I'm looking, I'm asking for the axe. Not sure what an M7 MBA is but I got mine at an ivy.
M7 MBA's:
Harvard (HBS) Stanford (GSB) Penn (Wharton) UChicago (Booth) Columbia (CBS) Northwestern (Kellogg) MIT (Sloan)
After two years in consulting, they will show you the door. Don't think it won't happen to you.
I'm an undergrad so I don't really know anything, but doesn't consulting allow you to retain exit opps into industry while you move up the ladder? Whereas by the time you make VP/MD in banking, you pretty much restrict yourself to continuing banking, starting a boutique, or taking a pay cut to go into corporate finance, hedge fund, or PE
It seems clear you know what the correct move is for you. This board is (obviously) highly biased towards IB and builds it up to be a glamorous profession, and it arguably was a few years back. But you've brought up many reasons why the sell-side is going to continue to contract in the coming years, driving an exodus of junior bankers out of the industry while it resets. The ridiculous inefficiencies in the sell-side are maddening, and the luster definitely wears off quickly if you are an intellectually curious person. I think you've figured out that IB is not for you, and you should take the MBB offer and run.
"I'm genuinely unhappy here."
All there is to it, leave. Life is too short.
I'd base your decision on your long term career goals to determine the optimal strategy.
If you want to reach "high finance" then you could always lateral into another bank or make the move to PE/HF. If you are at a BB, then you should be positioned well to transfer into virtually any comparable roll based on seniority within the realm of finance. This would be the route to "Boss Status".
If you've had enough of IB/high finance and want to begin your transition into a less taxing roll withing the next 5 years, then you should take the consulting gig. After a few years in consulting, you should be able to easily transition into a controller/manager position with an F500. You would be able to have a work life balance and have a little less trivial stress in your life.
At the end of the day, it is really based on what your long term goals are. Try to look at it logically by sitting down and mapping out all of the necessary steps and how each decision leads to the next phase of your career path. After giving it some thought, you will arrive at the choice that will ultimately be best for yourself and result in the highest personal utility and happiness.
Best of luck!
Psych, lateraling into PE is much easier and more expected at the analyst level, to the pt where the senior guys actively help you find jobs. Lateraling into PE as an associate is asking for trouble since the assumption is that if you're an associate you're looking at IB as a career, and if you get sniffed out (and you will if your senior guys are halfway competent - all it takes is one email to one guy "hey, do you know this kid?") its an instant sh1tcan. Also another view I have is that financial modeling skills at PE will be of less value-add than operating experience or strategic work.
Ah yes, those are definitely very notable points. Have you thought about switching firms or sectors? TMT is notoriously brutal, but would undoubtedly bring higher comp levels during bonus time. Or, have you considered moving down to a top MM? Also, what does the advancement opportunity look like with your current firm? Does reaching the VP level with your current firm excite you?
Psych, I'd be up for vp if I stayed but I'm noticing there's a vp glut here. There's almost 2x as many VPs as MDs, and the VPs haven't been getting their herds thinned. It used to be that there were plenty of great exits so they'd hire tons and promote tons. Now they still hire tons but the promote cycle has worked its way up to the vp level. Nobody gets automatic promote to MD, hence the VP glut. At best promotions are gonna get way more selective and not every associate becomes a VP, or a gruesome and continuous cull is coming.
No one dies wishing they had more money
... not.
All, I've decided to take the offer. Thanks for your views.
Hey man, that's great you pulled the trigger. Keep in mind you can always look at jumping to a company in the industry, too, if that interests you.
Couple things.
Making work out of nothing- a tactic that the lawyers have been using for years.
Now to the substance. Is there a chance you could find out if there is a glut of VPs in other offices of your firm? Maybe you could strategically relocate to another office and stay? But it sounds like you actually have already mentally checked out. I'd say go for the consulting and see how it goes. If it doesn't work out or you don't like it, call up one of your CEO clients and join the ranks of corporate management. Then your only job will be to make work out of nothing.
Out of curiosity, were you working in NYC or a satellite office?
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